CTEK reported net sales of SEK212m (vs. our est. of SEK186m), representing 6% org. growth (our est. -6%) vs Q2 2023’s sales of SEK199m. The beat is driven by low-voltage sales of SEK167m vs our est. of SEK136m – driven by the launch of the CS One in Australia and higher demand. EVSE sales totalled SEK45.3m vs our estimate of SEK50.4m (SEK60.7m in Q2’23), explained by relatively unchanged market conditions. The GM increased to 53% due to the sales mix, vs our est. 52% (50% in Q2’23). OPEX declined 6% y-o-y thanks to solid cost control (but was 8% higher than our est. due to increased sales efforts). The adj. EBITA margin reached 7% vs our estimated 3%, which compares to -2% in Q2’23.

We increase our low voltage sales, reduce our EVSE sales, and slightly increase our OPEX assumptions (driven by increased sales efforts). R&D expenditures are, however, expected to decrease as the CC3 is launched. In total, this increases our 2024-2026 Adj. EBITA by 5%-8%.

We consider the Q2 report to be solid, as it verifies CTEK’s ongoing profitable growth story. We expect product launches in the UK and Germany (CC3) and the GM partnership to ramp up EVSE sales in H2. Combined with reduced costs, we see a harvesting period ahead, which should drive earnings generation. We think CTEK is en route to delivering on the investment case presented in our initiation of coverage report (68 pages) published in June 2024. Our fair value range is increased to SEK11(10)-SEK42(40) with a base case of SEK28(26).